The Federal Government has reached a new Heads of Agreement with east coast liquefied natural gas (LNG) companies in an effort to keep downward pressure on energy prices for families and businesses.
Signed by Prime Minister Scott Morrison and LNG exporters, Australia Pacific LNG, Queensland Curtis LNG and Gladstone LNG, the agreement will ensure more gas is offered to the domestic market on competitive market terms at the expense of exports.
Prime Minister Scott Morrison said the agreement was central to Australia’s economic recovery and the Government’s JobMaker plan and would help secure competitively priced gas supply for the east coast market at least until 2023.
“Gas is critical to our economic recovery and this Agreement ensures Australian businesses and families have the gas supply they need at the cheapest possible price,” the Prime Minster said.
“This is about making Australia’s gas work for all Australians, while also supporting economic growth and backing important regional jobs in our expanding LNG sector.
“As part of our JobMaker plan we are delivering more Australian gas where it is needed at an internationally competitive price, this particularly includes manufacturing businesses who employ more than 850,000 Australians, many of which rely on gas to operate.”
Minister for Resources, Water and Northern Australia Keith Pitt said the new Heads of Agreement builds on the Australian Domestic Gas Security Mechanism and the first Heads of Agreement, which was signed in mid-2017 and caused spot price for gas to drop from $12.50 to $10.50 a gigajoule to the present level of between $7 to $5 a gigajoule.
“The strengthened Heads of Agreement commits LNG exporters to offer uncontracted gas to the domestic market first on competitive market terms before it is exported,” the Minister explained.
“It complements the Australian Domestic Gas Security Mechanism which also references the Australian Competition and Consumer Commission (ACCC) LNG netback price series.
“We are working to get the right balance between affordable gas for manufacturers and a price that encourages new gas resource development.
“I want to also acknowledge the success of our LNG export industry, especially here in regional Queensland.